Taxes Consolidation Act 1997 section 768

Allowance for know-how

Section 768 provides that a trader may deduct the cost of acquiring know-how as a business expense when computing trading profits for tax purposes.

• Know-how means industrial information and techniques used in manufacturing, processing, agricultural, forestry, fishing or mining operations, and expenditure on it may be deducted in computing trading profits where it is acquired for bona fide commercial reasons
• No deduction is available where know-how is acquired as part of the purchase of a trade, or where the buyer and seller are connected through control relationships, though a special regime applies where a connected person acquires the know-how separately from the trade
• Revenue may consult an expert to verify know-how claims, subject to a notification and appeal procedure designed to protect the claimant's trade from prejudicial disclosure
• The relief ceased to apply to companies from 7 May 2009 following the introduction of the intangible assets scheme in section 291A, but a two-year transitional election was available for expenditure incurred before 7 May 2011